5.Put the Customer FirstBy Elizabeth Bennett | Posted 2006-12-15 Email Print
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5. Put the Customer First
There is a big difference between trying to serve customers better and turning an existing business model on its head in response to customer needs. Farm Credit Services of America has more than doubled its revenue—to $700 million—in the last eight years by doing the latter, according to vice president Jim Greufe.
For six months in 1998, the senior management of the Omaha, Neb., financial services company, along with 20 employees, reengineered its business process to boost its size and revenue by better serving customers, Greufe says. Farm Credit, which sells financial products and services to farmers, ranchers and other agricultural businesses, experienced zero growth in the 1990s. Surveys and feedback from customers showed that Farm Credit was not meeting basic service needs; customers liked to conduct banking business on their own properties, and they complained that getting loan approval and processing took several days, longer than competitors.
The six-month project prompted some significant changes. Farm Credit decided to close more than half of its 90 branch offices to increase the number of employees at each branch and free up its then-200 financial officers to visit customer sites more often. Today, they spend roughly two-thirds of their time in the field, versus one-third prior to the reorganization, Greufe says.
The next step: find a technology to support the company's new customer-focused business model, Greufe says, because an existing Microsoft Outlook contact management system was not sufficient for housing the customer information the company planned to collect, and it was not connected to any other systems that held customer information. Farm Credit sought a commercial software package that would keep track of all customer transactions and interactions with salespeople and be able to communicate with back-office systems, such as databases that processed insurance and loan requests and software applications that kept track of customer account information. So in 2001, at a cost of $1.5 million, Farm Credit implemented a CRM software package from Pivotal, now owned by CDC Software.
The technology staff integrated about a half-dozen financial applications and databases with the Pivotal software so that today, when financial officers log in to the browser-based software application that is installed on every personal computer in the organization, it takes one click to view a customer's most recent transactions and a complete history of all phone and in-person interactions with the company.
The application also shows a list of the products a customer has not purchased, such as an insurance policy. And with that information, Greufe says, salespeople can intelligently cross-sell and up-sell products to customers. And if a customer inquired about a product the last time he talked to Farm Credit, it will be in the interaction history. "Customers often say we remember more than they do," he points out.
Farm Credit's revenue has grown 250% in the last eight years and the customer base has grown 40% to 69,000. Greufe won't attribute the growth entirely to technology, but he says the company saw a return on its investment in a matter of months: "It would have been impossible to serve that many customers without the CRM system."